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| 8-K - UNIVERSAL FOREST PRODUCTS, INC. 8-K 10-17-2012 - UFP INDUSTRIES INC | form8k.htm |
Exhibit 99(a)
News release
---------------AT THE COMPANY---------------
Lynn Afendoulis
Director, Corporate Communications
(616) 365-1502
FOR IMMEDIATE RELEASE
WEDNESDAY, October 17, 2012
UFPI grows Q3 net sales by 13.7%; posts double-digit sales growth in 4 of 5 markets
– Higher lumber prices boost selling prices in the quarter –
– Earnings negatively affected by one-time charge in anticipation of Canadian duties –
GRAND RAPIDS, Mich., Oct. 17, 2012 – Universal Forest Products, Inc. (Nasdaq: UFPI) today announced third-quarter 2012 results, including net sales of $533.4 million, an increase of 13.7 percent over net sales of $468.9 in the third quarter of 2011. Net earnings were $4.2 million, or $0.21 per diluted share, compared to net earnings of $5.6 million, or $0.29 per diluted share, in the same period of 2011 and reflect a one-time, pretax charge of $2 million for a loss contingency associated with duties being assessed by the Canadian government on certain products imported from China.
Universal saw strong sales growth in four of five markets, including increases of more than 30 percent in its residential construction and manufactured housing markets and of 20 percent in its industrial market. While sales were bolstered by a rising lumber market, the Company saw solid unit sales growth in these markets. Sales to retail building materials customers declined, although the Company saw strong success in its strategies to diversify its customer base and grow its product mix in that market.
“We executed on the strategies we established, and I’m proud of our people,” said CEO Matthew J. Missad. “We grew sales, kept an eye on our expenses and continued to diversify via new products, new markets and with new customers. I believe we’re doing all the right things to grow our profitability and our success.”
—more—
Universal Forest Productions, Inc.
“Unfortunately, the Canadian government chose to impose retroactive assessments for antidumping and countervailing duties tied to certain extruded aluminum products imported from China. While we continue to work with the government to clarify the applicability of these rules to our products, we recorded a charge in the third quarter for this matter,” Missad added.
Lumber prices, which affect the Company’s selling prices, were up 25.3 percent in the quarter. By market, Universal posted the following gross sales results for the third quarter of 2012:
Retail building materials: $204.4 million, a decrease of 3.1 percent from 2011. The Company focused on growing sales to independent retailers while diversifying the products it offers to big box customers and enhancing other areas of customer relationships, such as service and innovation. Sales to independent retailers increased by more than 16 percent. Universal is aggressively focusing on hitting profitability goals, on providing new products, and on being the low-cost producer.
Industrial packaging/components: $153.9 million, up 20.0 percent over the third quarter of 2011. The Company grew sales at a time when industrial production in the United States fell 1.2 percent in August after having risen 0.5 percent in July, and when shipments of durable goods declined (3 percent in July from the previous month, and 13.2 percent in August, the largest decrease since January 2009). The Company continues to focus on adding customers and products, on expanding its reach into non-wood packaging materials and on providing complete packaging solutions.
Manufactured housing and recreational vehicles: $89.0 million, an increase of 35.5 percent over 2011. According to the most recent statistics available, shipments of HUD-Code homes in July and August 2012 were up 14.6 percent and 7.8 percent, respectively, and have seen year-over-year growth every month of 2012. This growth is attributed, in part, to areas of the U.S. and Canada where shale oil and gas development activities are driving demand for temporary homes. It remains an important market for Universal, which is focused on serving existing customers with unparalleled products and service, and on adding to the products it supplies.
Residential construction: $69.6 million, up 33.8 percent over the same period of 2011. The Company was encouraged by stronger building activity in many areas of the country, although it believes there is a long way to go to get to healthy, sustainable building levels. For June to August 2012, total starts were up 24.4 percent over the same period last year, including gains of 22.9 percent and 28.5 percent in single-family and multifamily starts, respectively.
—more—
Universal Forest Productions, Inc.
Commercial construction and concrete forming: $23.9 million, an increase of 11.4 percent over 2011. Universal continues to see opportunity in the concrete forming business, in which it manufactures and/or supplies forms and other materials for concrete construction projects, from roads to stadiums. This is a highly fragmented market that capitalizes on Universal’s engineering and manufacturing capabilities and on its nationwide presence.
CONFERENCE CALL
Universal Forest Products will conduct a conference call to discuss information included in this news release and related matters at 8:30 a.m. ET on Thursday, October 18, 2012. The call will be hosted by CEO Matthew J. Missad and CFO Michael Cole, and will be available for analysts and institutional investors domestically at (866) 271-6130 and internationally at (617) 213-8894. Use conference pass code 99624776. The conference call will be available simultaneously and in its entirety to all interested investors and news media through a webcast at http://www.ufpi.com. A replay of the call will be available through Friday, November 16, 2012, domestically at (888) 286-8010 and internationally at (617) 801-6888. Use replay pass code 14438073.
UNIVERSAL FOREST PRODUCTS, INC.
Universal Forest Products, Inc. is a holding company that provides capital, management and administrative resources to subsidiaries that design, manufacture and market wood and wood-alternative products for DIY/retail home centers and other retailers, structural lumber products for the manufactured housing industry, engineered wood components for residential and commercial construction, specialty wood packaging and components for various industries, and forming products for concrete construction. The Company's consumer products subsidiary offers a large portfolio of outdoor living products, including wood composite decking, decorative balusters, post caps and plastic lattice. Its lawn and garden group offers an array of products, such as trellises and arches, to retailers nationwide. Universal’s subsidiaries also provide framing services for the site-built construction market. Founded in 1955, Universal Forest Products is headquartered in Grand Rapids, Mich., with operations throughout North America. For more about Universal Forest Products, go to www.ufpi.com.
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the markets we serve, the economy and the Company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. The Company does not undertake to update forward-looking statements to reflect facts, circumstances, events, or assumptions that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Among the factors that could cause actual results to differ materially from forward-looking statements are the following: fluctuations in the price of lumber; adverse or unusual weather conditions; adverse conditions in the markets we serve; government regulations, particularly involving environmental and safety regulations; and our ability to make successful business acquisitions. Certain of these risk factors as well as other risk factors and additional information are included in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.
###
Universal Forest Productions, Inc.
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FOR THE NINE MONTHS ENDED
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SEPTEMBER 2012/2011
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||||||||||||||||||||||||||||||||
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Quarter Period
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Year to Date
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(In thousands, except per share data)
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2012
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2011
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2012
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2011
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||||||||||||||||||||||||||||
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NET SALES
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$ | 533,366 | 100 | % | $ | 468,941 | 100 | % | $ | 1,584,170 | 100 | % | $ | 1,400,313 | 100 | % | ||||||||||||||||
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COST OF GOODS SOLD
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478,139 | 89.6 | 414,583 | 88.4 | 1,403,530 | 88.6 | 1,247,954 | 89.1 | ||||||||||||||||||||||||
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GROSS PROFIT
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55,227 | 10.4 | 54,358 | 11.6 | 180,640 | 11.4 | 152,359 | 10.9 | ||||||||||||||||||||||||
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
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44,419 | 8.3 | 44,013 | 9.4 | 139,303 | 8.8 | 135,829 | 9.7 | ||||||||||||||||||||||||
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CANADIAN ANTI-DUMPING DUTY ASSESSMENT
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2,000 | 0.4 | - | - | 2,000 | 0.1 | - | - | ||||||||||||||||||||||||
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NET (GAIN) LOSS ON DISPOSITION OF ASSETS, EARLY RETIREMENT, AND OTHER IMPAIRMENT AND EXIT CHARGES
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498 | 0.1 | 207 | - | (6,285 | ) | (0.4 | ) | 3,696 | 0.3 | ||||||||||||||||||||||
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EARNINGS FROM OPERATIONS
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8,310 | 1.6 | 10,138 | 2.2 | 45,622 | 2.9 | 12,834 | 0.9 | ||||||||||||||||||||||||
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OTHER EXPENSE, NET
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651 | 0.1 | 840 | 0.2 | 2,330 | 0.1 | 2,237 | 0.2 | ||||||||||||||||||||||||
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EARNINGS BEFORE INCOME TAXES
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7,659 | 9,298 | 43,292 | 10,597 | ||||||||||||||||||||||||||||
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INCOME TAXES
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2,903 | 0.5 | 3,293 | 0.7 | 16,140 | 1.0 | 3,508 | 0.3 | ||||||||||||||||||||||||
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NET EARNINGS
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4,756 | 0.9 | 6,005 | 1.3 | 27,152 | 1.7 | 7,089 | 0.5 | ||||||||||||||||||||||||
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LESS NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTEREST
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(558 | ) | (0.1 | ) | (389 | ) | (0.1 | ) | (1,290 | ) | (0.1 | ) | (866 | ) | (0.1 | ) | ||||||||||||||||
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NET EARNINGS ATTRIBUTABLE TO CONTROLLING INTEREST
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$ | 4,198 | 0.8 | $ | 5,616 | 1.2 | $ | 25,862 | 1.6 | $ | 6,223 | 0.4 | ||||||||||||||||||||
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EARNINGS PER SHARE - BASIC
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$ | 0.21 | $ | 0.29 | $ | 1.31 | $ | 0.32 | ||||||||||||||||||||||||
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EARNINGS PER SHARE - DILUTED
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$ | 0.21 | $ | 0.29 | $ | 1.31 | $ | 0.32 | ||||||||||||||||||||||||
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COMPREHENSIVE INCOME
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6,270 | 4,491 | 28,490 | 6,496 | ||||||||||||||||||||||||||||
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LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
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(957 | ) | 130 | (1,674 | ) | (594 | ) | |||||||||||||||||||||||||
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COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST
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$ | 5,313 | $ | 4,621 | $ | 26,816 | $ | 5,902 | ||||||||||||||||||||||||
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SUPPLEMENTAL SALES DATA
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Quarter Period
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Year to Date
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Market Classification
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2012
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%
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2011
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%
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2012
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%
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2011
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%
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||||||||||||||||||||||||
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Retail Building Materials
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$ | 204,368 | 39 | % | $ | 210,874 | 44 | % | $ | 682,016 | 43 | % | $ | 673,614 | 48 | % | ||||||||||||||||
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Residential Construction
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69,648 | 13 | % | 52,066 | 11 | % | 181,750 | 11 | % | 156,508 | 11 | % | ||||||||||||||||||||
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Commercial Construction and Concrete Forming
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23,850 | 4 | % | 21,415 | 4 | % | 68,236 | 4 | % | 57,206 | 4 | % | ||||||||||||||||||||
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Industrial
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153,906 | 28 | % | 128,219 | 27 | % | 444,499 | 28 | % | 363,975 | 25 | % | ||||||||||||||||||||
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Manufactured Housing
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89,023 | 16 | % | 65,717 | 14 | % | 232,755 | 14 | % | 177,371 | 12 | % | ||||||||||||||||||||
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Total Gross Sales
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540,795 | 100 | % | 478,291 | 100 | % | 1,609,256 | 100 | % | 1,428,674 | 100 | % | ||||||||||||||||||||
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Sales Allowances
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(7,429 | ) | (9,350 | ) | (25,086 | ) | (28,361 | ) | ||||||||||||||||||||||||
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Total Net Sales
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$ | 533,366 | $ | 468,941 | $ | 1,584,170 | $ | 1,400,313 | ||||||||||||||||||||||||
Universal Forest Productions, Inc.
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SEPTEMBER 2012/2011
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(In thousands)
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ASSETS
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2012
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2011
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LIABILITIES AND EQUITY
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2012
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2011
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CURRENT ASSETS
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CURRENT LIABILITIES
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Cash and cash equivalents
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$ | 4,908 | $ | 18,649 |
Accounts payable
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$ | 72,080 | $ | 65,315 | ||||||||
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Accounts receivable
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191,178 | 170,030 |
Accrued liabilities
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58,659 | 56,823 | ||||||||||||
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Inventories
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209,138 | 180,882 |
Current portion of long-term debt and capital leases
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40,750 | 266 | ||||||||||||
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Assets held for sale
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5,082 | ||||||||||||||||
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Other current assets
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26,390 | 25,429 | |||||||||||||||
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TOTAL CURRENT ASSETS
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431,614 | 400,072 |
TOTAL CURRENT LIABILITIES
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171,489 | 122,404 | ||||||||||||
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OTHER ASSETS
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16,178 | 11,469 |
LONG-TERM DEBT AND
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||||||||||||||
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INTANGIBLE ASSETS, NET
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169,108 | 168,962 |
CAPITAL LEASE OBLIGATIONS,
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less current portion
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16,684 | 52,200 | |||||||||||||||
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PROPERTY, PLANT AND EQUIPMENT, NET
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219,221 | 217,920 |
OTHER LIABILITIES
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36,231 | 37,850 | ||||||||||||
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EQUITY
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611,717 | 585,969 | |||||||||||||||
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TOTAL ASSETS
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$ | 836,121 | $ | 798,423 |
TOTAL LIABILITIES AND EQUITY
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$ | 836,121 | $ | 798,423 | ||||||||
Universal Forest Productions, Inc.
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
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FOR THE NINE MONTHS ENDED
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SEPTEMBER 2012/2011
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(In thousands)
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2012
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2011
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net earnings attributable to controlling interest
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$ | 25,862 | $ | 6,223 | ||||
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Adjustments to reconcile net earnings attributable to controlling interest to net cash from operating activities:
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Depreciation
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22,154 | 22,260 | ||||||
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Amortization of intangibles
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2,218 | 4,129 | ||||||
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Expense associated with share-based compensation arrangements
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994 | 1,281 | ||||||
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Excess tax benefits from share-based compensation arrangements
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(73 | ) | (138 | ) | ||||
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Expense associated with stock grant plans
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84 | 162 | ||||||
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Loss reserve for notes receivable
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767 | - | ||||||
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Deferred income tax credit
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(1,223 | ) | (222 | ) | ||||
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Net earnings attributable to noncontrolling interest
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1,290 | 866 | ||||||
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Equity in earnings of investee
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(25 | ) | (52 | ) | ||||
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Net gain on sale or impairment of property, plant and equipment
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(7,228 | ) | (183 | ) | ||||
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Changes in:
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Accounts receivable
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(63,119 | ) | (47,438 | ) | ||||
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Inventories
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(13,483 | ) | 9,497 | |||||
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Accounts payable
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22,285 | 5,849 | ||||||
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Accrued liabilities and other
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13,108 | (109 | ) | |||||
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NET CASH FROM OPERATING ACTIVITIES
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3,611 | 2,125 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Purchase of property, plant, and equipment
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(21,728 | ) | (21,774 | ) | ||||
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Proceeds from sale of property, plant and equipment
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15,092 | 1,485 | ||||||
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Acquisitions, net of cash received
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(2,599 | ) | - | |||||
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Purchase of patents
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(95 | ) | (116 | ) | ||||
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Collections of notes receivable
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915 | 308 | ||||||
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Advances of notes receivable
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(1,157 | ) | - | |||||
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Other, net
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(387 | ) | 100 | |||||
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NET CASH FROM INVESTING ACTIVITIES
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(9,959 | ) | (19,997 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Net borrowings (repayments) under revolving credit facilities
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6,217 | (2,109 | ) | |||||
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Repayment of long-term debt
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(3,547 | ) | (745 | ) | ||||
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Debt issuance costs
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(86 | ) | - | |||||
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Proceeds from issuance of common stock
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1,826 | 1,306 | ||||||
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Purchase of additional noncontrolling interest
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- | (402 | ) | |||||
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Distributions to noncontrolling interest
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(871 | ) | (1,213 | ) | ||||
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Capital contribution from noncontrolling interest
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281 | 80 | ||||||
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Dividends paid to shareholders
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(3,946 | ) | (3,905 | ) | ||||
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Excess tax benefits from share-based compensation arrangements
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73 | 138 | ||||||
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Other, net
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4 | 8 | ||||||
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NET CASH FROM FINANCING ACTIVITIES
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(49 | ) | (6,842 | ) | ||||
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NET CHANGE IN CASH AND CASH EQUIVALENTS
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(6,397 | ) | (24,714 | ) | ||||
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CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
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11,305 | 43,363 | ||||||
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CASH AND CASH EQUIVALENTS (OVERDRAFT), END OF PERIOD
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$ | 4,908 | $ | 18,649 | ||||
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SUPPLEMENTAL INFORMATION:
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Interest paid
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$ | 2,498 | $ | 2,162 | ||||
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Income taxes paid
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15,797 | 3,483 | ||||||